Errors of Enchantment

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Nora Says No to the League

08.04.2016

LWV VOTE

Errors of Enchantment avoids politics — the Rio Grande Foundation is a nonpartisan, tax-exempt research organization — and won’t tell you how to cast your vote for New Mexico’s next secretary of state.

But yesterday, an article in The Santa Fe New Mexican on the race caught our attention. It highlights the need for voters to be aware of the ideological leanings of benign-sounding organizations active in lobbying and elections.

Noting that “no fewer than 17 of the officers and leaders of the League of Women Voters in chapters around the state are solidly and openly backing my opponent,” Nora Espinoza, the GOP’s nominee for secretary of state, has refused the group’s invitations to appear at public forums with her opponent, Democrat Maggie Toulouse Oliver.

League officials have donated “more than $8,000” to Oliver, Espinoza said — a “substantial amount for an office that is administrative in nature, and from members of an organization that touts itself as being ‘nonpartisan.’”

Predictably, the league’s president denounced the GOP candidate’s comments as an “offensive, untrue, intentional misrepresentation and a flimsy excuse for not participating in our candidate forums.”

But the record is pretty clear. The league is committed to an undeniably — many would say radically — liberal agenda. Last year, the Capital Research Center published a useful primer on the organization’s history and record. Founded in 1920, when women won the right to vote nationally, the league quickly involved itself in lobbying. (It supported the creation of the United Nations, and was heavily involved in the civil-rights movement.) In our era, it “has been a steady voice for legislation to deal with climate change, establish stricter gun control and environmental legislation, and make the Affordable Care Act (Obamacare) the law of the land.”

Espinoza has a personal reason to eschew involvement with the league. Reporter Steve Terrell wrote that earlier this year, the “League of Women Voters openly opposed a bill sponsored by Espinoza that would have required voters to present photo identification at polling places.”

So nationally and in New Mexico, the league doesn’t represent women. It speaks for left-wing women. Nothing wrong with free speech, of course. But for citizens, taxpayers, and voters, truth in advertising matters. It’s easy for unsophisticated observers to get snookered by liberal organizations that cleverly craft an image of moderation. (New Mexico Voices for Children is another example of a mom-and-apple-pie-named entity. It advocates for Big Government “solutions” to New Mexico’s many socioeconomic woes.) The League of Women Voters has every right to participate in the political process. But the lobbying group shouldn’t be shocked and offended when a politician opposed to its agenda refuses to lend credibility to the organization, and says “thanks, but no thanks.”

LEED Schools ≠ “Green”: How LEED Certification Drives Up Costs, Fails to Deliver Energy Efficiency

08.03.2016

ALBUQUERQUE — Tax-free shopping for “back to school” is getting under way and both students and teachers can see summers’ end from here.

But what kind of schools will those students head back to? New Mexico Executive Order 2006-

001, signed by Governor Bill Richardson, requires public buildings over 15,000 square feet in size to receive Leadership in Energy and Environment Design (LEED) certification from the U.S. Green Building Council (USGBC).

The executive order claims LEED standards deliver “utility bill savings,” arguing “emphasis should be placed on the ‘life cycle costs’ of a public building rather than solely on its initial capital costs.” Is this true or is LEED a costly use of scarce school construction resources for little or no energy savings?

The Rio Grande Foundation’s Todd Myers answers that question in his new policy brief, “New Mexico’s LEED Standards for School Construction: Not Green, not Cost-effective,” which provides detailed analysis of school energy consumption in both the Albuquerque and Santa Fe school districts.

Myers argues that LEED’s energy savings must be substantial in order to make up for added costs.  After looking at schools across the country, he argues, “LEED Gold – the second – highest rating – costs about 10 percent more in construction costs than traditional schools.

He cites Santa Fe as a model, noting that “they have built extremely efficient schools without the ‘green’ certification.”

Albuquerque’s Public Schools’ experience is more typical with 2015 showing that “when compared to other elementary schools in Albuquerque, green elementary schools on average are slightly more energy efficient but are unlikely to save enough money over the lifespan of the buildings to make the ‘green’ investments and certification worthwhile.”

The experience of schools across the country demonstrates that district facilities directors are often adept at finding cost-effective ways to reduce energy use, based on the particular buildings they manage. Requiring them to meet a formulaic, one-size-fits-all “green” approach, however, often leads them in the wrong direction, by increasing costs without returning savings.

“Ultimately,” Myers concludes, “for taxpayers, students and the environment – the real-world data shows that New Mexico’s green schools fall well short of their energy-saving promises.”

“Efficiency is about more than a press release and a plaque on the wall.”

 

Attention, Shoppers: Back-to-School Tax Gimmickry

08.03.2016

back to school

Hefty budget deficits aren’t keeping New Mexico from conducting its annual “Back to School Tax Free Holiday.” Starting Friday, and running through Sunday, “collection of gross receipts tax on sales of qualifying items” will be suspended.

On its website, the Taxation and Revenue Department gushes that the holiday is “nothing short of a bonanza” for those with “school-age children.” Purchases that qualify for the perk include clothing and shoes priced less than $100, “desktop, laptop, tablets or notebook computers” cheaper than $1,000, and school supplies “for use in standard, general-education classrooms” costing less than $30.

The modern era of sales-tax holidays began in 1997, when New York attempted to reclaim business being lost to nearby states with less burdensome levies. Since then, dozens have states have launched similar initiatives, exempting everything from clothing to computers, disaster-preparedness equipment to “Energy Star” products.

As it does every year, the Tax Foundation has issued a blistering assault on sales-tax holidays, calling them “unjustifiable government distortions” that fail to provide “any significant boost to the economy.” Authors Scott Drenkard and Joseph Henchman write that the events merely shift the timing of the purchase of goods, and thus have no stimulative value. In addition, if stores raise their prices in anticipation of the holidays, the value to consumers is weakened. Finally, compliance is no fun for stores. In response to a 2015 survey by the Massachusetts Retailers Association, one vendor outlined its objection: “The sales tax holiday has created more problems than benefits for us. Business is nonexistent three weeks before and two weeks after. As a result, five weeks of business are crammed into two days, and the total amount of sales does not come close to five normal weeks of summer business.”

It’s rare to get the right and left to agree on any public policy, but both sides have serious reservations about sales-tax holidays. The limited-government community seeks consumption taxes that are broadly applied, with low rates all year ’round. “Progressives” decry the revenue losses that the holidays produce — money that is not available for more “public investments.”

So how about a right-left alliance, aimed at permanently killing the useless gimmick that is New Mexico’s annual GRT holiday?

Why Is There a Lodging Tax, Anyway?

08.02.2016

airbnb

In this morning’s edition, the Albuquerque Journal joined the chorus of voices calling for Airbnb and other room-renting services to pay lodging taxes: “While private homeowners should not have to abide by the full collection of regulations inflicted on public business sites, the idea of collecting the same taxes innkeepers pay to promote the hospitality business has merit.”

Under Section 3-38-15 NMSA 1978, the state allows local governments to “impose by ordinance an occupancy tax for revenues on lodging.” Regardless of the size of the municipality or county applying the levy and the rate chosen, a sizable chunk of the revenue generated must be spent on “advertising, publicizing and promoting tourist-related attractions, facilities and events.”

Wait a second. Shouldn’t the tourism industry spend its own money, as it best see fits, to market New Mexico’s scenery, history, culture, and cuisine to the world?

It’s a question that goes unasked, and not just in the Land of Enchantment. Government at all levels has involved itself in tourism for decades. Elected officials don’t feel any need to impose taxes to promote health clubs or car dealerships or hardrock mining, but tourism is somehow thought to be … different.

Balderdash. The lodging tax, and the activities it funds, have difficult-to-document “benefits” to the public, and tourism promotion fails to meet the standard for essential government services.

Of course taxes should be applied in a nondiscriminatory fashion. Whether you’re a homeowner or a giant corporation, if you’re in the lodging business, you should be subject to the lodging tax. But delving beyond the issue of fairness reveals some disturbing questions about the “need” for the levy. A strong case can be made that it shouldn’t exist at all.

Look carefully for impact of Las Cruces wage hike

08.01.2016

This month, the Las Cruces City Council assessed the early impact of the city’s 35 percent minimum wage increase, the first phase of which took effect in January 2015.

Its verdict: The wage hike has not had a negative effect on the Las Cruces economy. Proponents who led the heated 2014 fight to pass the controversial measure greeted the news as evidence that it has been a success. But a closer look at how the council staff came to its conclusion suggests that any celebrations should be put on hold.

The council’s assessment was based on municipal-level changes in sales tax receipts, property sales, and overall employment levels in 2015 versus 2014. But these metrics are too broad to be affected by the small slice of the population affected by the wage hike. (The city manager estimated that less than 1 percent of the city’s payroll comes from minimum wage earners.) These employees’ ability to impact overall consumer spending, property sales and employment levels is negligible at best.

To accurately judge the impact of Las Cruces’ minimum wage increase – or any minimum wage increase – you must start by looking at the employment conditions among industries or employees that are directly affected by them. That means, for example, looking at how the restaurant and hospitality industries are faring in an affected city or state. (In empirical studies, economists often compare data from locales with a wage hike to those without, while controlling for relevant economic conditions.)

The 2015 government data that has been released for these industries are preliminary and include the population of the entire Las Cruces metro area. For a clearer picture of the minimum wage’s impact, residents must wait for additional detail and a more robust empirical analysis. Nevertheless, the early numbers are not promising, and certainly don’t justify the City Council’s rose-colored claims that a hike has had no impact.

For example, data released by the Census Bureau show that the net number of restaurants in the Las Cruces metro area declined by 2.7 percent in 2015. The net number of hotels in the area fell by 10 percent for the year as well.

There was a 9 percent employment drop at grocery stores, another big starter wage employer, in the year. And employment at gas stations fell in 2015 for the first time since 2009, after steadily increasing in each of the prior years.

The anecdotal evidence also suggests it is too soon to say the wage hike hasn’t had a negative impact. Greg Johns, co-owner of two Daddy O’s Car Wash operations in Las Cruces, told the Sun-News the wage hike caused him to abandon plans to open a new location in the city that would have employed 30 people. Instead, Johns decided to expand in El Paso.

And Lorenzo’s restaurant on University Avenue was forced to cut three jobs, shorten hours, and limit its employees’ meal items because of the costs associated with the wage hike.

These aren’t jobs that Las Cruces can afford to lose. Young residents in the area currently face an average 23 percent unemployment rate.

Minimum wage increases of the level pursued by Las Cruces rarely — if ever — affect the broader economy. This is a straw man put forth by proponents to easily attack. The bulk of economic research concludes, however, that wage hikes do reduce job opportunities for young and less-skilled jobseekers. A recent summary of all recent minimum wage research published last year by the San Francisco Federal Reserve confirms these job losses may be greater than originally thought.

Ultimately, it is too soon to determine the true effects of the Las Cruces wage hike. The City Council even admitted this in its assessment. The fact that it still came to the rosy conclusion it did suggests a political rather than economic motive.

Gessing is president of the Rio Grande Foundation. Saltsman is research director at the Employment Policies Institute in Washington, D.C.

Las-Cruces-City-Council-review-minimum-wage-increase

RTW Job-Creation Returns to Form in July

08.01.2016

The Foundation is tracking announcements of expansions, relocations, and greenfield investments published on Area Development‘s website. Founded in 1965, the publication “is considered the leading executive magazine covering corporate site selection and relocation. … Area Development is published quarterly and has 60,000 mailed copies.” In an explanation to the Foundation, its editor wrote that items for Area Development‘s announcements listing are “culled from RSS feeds and press releases that are emailed to us from various sources, including economic development organizations, PR agencies, businesses, etc. We usually highlight ones that represent large numbers of new jobs and/or investment in industrial projects.”

In June, just 57.5 percent of jobs were to be created in right-to-work (RTW) states — the lowest share since we began our monitoring in January 2015. But in July, the worker-freedom advantage returned in a big way. Of 13,906 projected jobs, 11,688 — 84.1 percent — were slated for RTW states:

jul_rtw

In the three sub-metrics the Foundation scrutinizes, RTW maintained its impressive dominance.

Seventeen domestic companies based in non-RTW states announced investments in RTW states. Just one announcement went the other way.

RTW prevailed in foreign direct investment, too. Sixteen projects are headed to RTW states, with four to occur in non-RTW states.

Two relocations will cross the barrier from non-RTW to RTW, with none headed from RTW to non-RTW.

While New Mexico’s economic-development bureaucrats dream of “Spaceport America” spurring a spacefaring “industry cluster” in the Land of Enchantment, firms in the sector continue to invest elsewhere. In July, Lockheed Martin picked Florida to “advance its role in spacecraft manufacturing,” bringing 300 jobs to Titusville. France-based Thales selected the Sunshine State for two investments. It plans to hire 327 workers in Melbourne and 173 employees in Orlando. In Mississippi, Aerojet Rocketdyne plans to expand its Center of Excellence for Large Liquid Rocket Engine Assembly by 70 positions.

Other marquee RTW investments included German manufacturer Gerhardi Kuntstofftechnik’s choice of Alabama for its first U.S.-based plant (235 jobs) and the decision by Eurotranciatura, a Spanish-Italian joint venture, to expand its factory in Tennessee (170 jobs).

Methodological specifics:

* All job estimates — “up to,” “as many as,” “about” — were taken at face value, for RTW and non-RTW states alike.

* If an announcement did not make an employment projection, efforts were made to obtain an estimate from newspaper articles and/or press releases from additional sources.

* If no job figure could be found anywhere, the project was not counted, whether it was a RTW or non-RTW state.

* Non-border-crossing relocations were not counted, border-crossing relocations were.

Gessing to offer “Crash Course in Free Market Economics” through OASIS

07.27.2016

Explore our energizing summer classes

OASIS is a great organization that puts on a variety of classes for older folks and “seasoned citizens.” If you want to find out more information and useful data to understand economic issues facing our nation, state, and community, sign up now for an OASIS class this Tuesday, August 2. The class will go from 1:00 to 2:30pm.

You can sign up here. It is class 11.

The “syllabus” notes and location are as follows:

New Mexico never quite made it out of the Great Recession of 2008. Our economy faces numerous challenges including high unemployment, low workforce participation, high government indebtedness, and low graduation rates. Paul Gessing believes the solution requires a transformation in New Mexico’s economy — away from reliance on federal spending and toward a larger private sector economy. He shares details on how a healthy dose of free market policies can turn our state around.

American Square Shopping Center
3301 Menaul Blvd NE, Suite 18
Albuquerque 87107 NM

We are just west of Carlisle NE in the building facing the American Home Furniture store.

Rio Grande Foundation honors life and work of Nobel Laureate economist Milton Friedman

07.27.2016

2012 FLF Logo RGF Logo(Albuquerque) — The Rio Grande Foundation today joined more than 100 organizations across the United States and around the world hosting events to honor the life and work of Milton Friedman, a Nobel Laureate who is widely recognized as one of the most influential economists of the last century and the father of the modern educational choice movement.

This was the 10th and final celebration of Friedman Legacy Day, which was established following Friedman’s death in 2006 as a way to remember his incomparable contributions to modern free market and economic theory.

Our speaker will be Bill Peacock, Director of the Center for Economic Freedom, with the Texas Public Policy Foundation. Peacock’s talk is entitled “When Free to Choose why do so many people choose Texas?” Specifically Peacock will discuss specific policies and cultural traits that allow Texas to be such a magnet for jobs and economic growth, what can New Mexico learn from Texas, and threats to Texas’ success.

Location:  Room 2401, UNM Law School which is located at:

1117 Stanford Dr NE, Albuquerque, NM 87106;

When: July 28, 2016, 6:00pm to 7:30pm;

Cost: Event is free and open to the public; Register by clicking here.

Said Rio Grande Foundation president Paul Gessing, “We have been pleased to participate in ‘Friedman Day’ celebrations for each of the ten years during which they were held. Friedman’s legacy is worth remembering and forms the basis for the Foundation’s mission.”

Rio Grande Foundation’s event was co-sponsored by the Friedman Foundation for Educational Choice, a national nonprofit organization founded by Dr. Friedman and his wife, Rose. Per their wishes, the Friedman Foundation will be changing its name today to reflect the future of the organization while maintaining the Friedmans’ intellectual legacy of educational choice.

Busting the City’s “Myth Busting” on Albuquerque Rapid Transit

07.27.2016

The City of Albuquerque has trotted out a new page in which they claim to “bust some myths” about their precious Albuquerque Rapid Transit.  The new report was covered by KOB TV.

Unfortunately, the City is being very selective in its approach and is manipulating language in an attempt to deflect valid criticisms of ART opponents. The following is a response to many of the alleged “myths” supposedly being “busted” by the City. In reality, they put words in the mouths of critics or simply misrepresent their concerns.

Myth: Parking spots on Central Avenue will be reduced or eliminated because of ART

According to the group “Make ART Smart,” 194 parking spots will be eliminated due to ART. The City has not specifically addressed that number. Replacing spots along the road with a Park and Ride at EXPO NM will don nothing at all in terms of businesses. That part of Central does not want for parking, it is primarily in Nob Hill and near Old Town where the concerns are and parking problems exist. They admit to spots being lost there.

Myth:
We will cut down all the trees on Central Avenue because of ART

Again, reference the information from Make ART Smart which claims 217 trees will be cut down. If that is wrong, why? It sounds like the City is planning to cut down a bunch of mature trees and replace them with saplings. That is not a great tradeoff and it shows how the City is attempting to manipulate language to its ends.

Myth:
The removal of left turns along the route will hurt businesses and create safety problems.

They have zero data to back them up both in terms of the safety situation and on the economic situation relating to local businesses. They are merely asserting things that have no basis in fact.

The example from Guadalajara is meaningless. The city has been talking about Cleveland for years and now they want to talk about Guadalajara?

Myth:
ART will make Central Avenue less pedestrian friendly.

If the goal is to make Central more pedestrian friendly, that can be done without spending all this extra money on ART. Central is already the most pedestrian friendly area in town with the possible exceptions of Old Town and parts of downtown. They are trying to change the subject.

Myth:
Traffic will be reduced to one lane throughout the entire project and traffic will be unbearable.
They are setting up a straw-man. Vehicle traffic will be reduced and congestion will be worsened due to ART. Their own data say this. Again, they are trying to change the argument.

Myth
The project only has a 19-year shelf life

As noted in their own arguments, ART is not about transportation, it is about redevelopment. No one knows what our transportation system will look like in 20 years, including the City’s planning department. Big, expensive transit projects like the Rail Runner and Washington, DC’s METRO are seeing ridership plummet as new technologies like ride-sharing come online. Self-driving cars could be next. The shelf-life for ART could be even shorter than 20 years.

Myth
This project is going to destroy historic districts and lose the historic ambience of the corridor

The entire goal of this project as stated earlier is to “redevelop” Central. The bus is just the primary tool being used by the City to do that. Central is unique and has evolved over time, but this bus will DOMINATE Central in a way that will fundamentally change its character and in ways that other bus systems do not.

Myth:
Businesses will close along Central Avenue.

As noted, businesses have and will continue to open and close along Central, but massive construction projects and both temporary and long-term traffic congestion are not going to help matters for businesses along the route. Central, like the rest of Albuquerque, would benefit from stronger leadership on the economic issues at both City Hall and in Santa Fe.

Myth:
The city lied on its application for the categorical exclusion about there being no opposition to the project.

It is impossible to prove the City “lied,” but according to recent polling data, 86% of ABQ voters are aware of the project and oppose it by a 2-1 basis. The City’s voters are overwhelmingly opposed to ART and this was not reflected in the City’s filings.

Conclusion: With all of the serious issues facing our City, even reasonable supporters of ART should consider three things:

  1. This is not the highest priority right now. Economic growth and crime should be.
  2. This project in its current form does not have the support of voters or most businesses along Central and should be reconsidered or seriously altered based on community input.
  3. This project would never be built were it not for the lure of “free” federal dollars which Washington continues to dole out despite being more than $19 trillion in debt.

 

Left wing poverty/”justice” groups and NM Senate candidate Jeff Steinborn support killing good paying jobs for low-skill workers

07.22.2016

Frequently, we at the Rio Grande Foundation share critiques with self-identified left-liberals relating to problems in the economy. For example, there is no doubt that poverty and a lack of good-paying jobs is a problem (perhaps THE problem) in New Mexico. It is reflected throughout the “Kids Count” report that is co-produced by the left-wing NM Voices for Children and the Annie E. Casey Foundation. By our count, no fewer than six of the 16 variables included in their own report were directly related to poverty and a lack of jobs.

If jobs and the economy are so critical to getting families out of poverty, why would Voices support Obama Administration policies that CLEARLY AND DIRECTLY would kill good-paying jobs for relatively low-skilled workers in New Mexico? You’ve got me, but I think it has a lot to do with just supporting big-government policies and politicians regardless of their impact. Voices signed on to a recent letter with several other left-wing groups in support of the Obama Administration’s moratorium on coal leases on federal lands. Other left-wing non-environmental groups or individuals include New Mexico Center for Law and Poverty and one sole political candidate for New Mexico’s Senate Jeff Steinborn.

According to data from the BLM, as of 2013, there are four producing coal mines in New Mexico, two on federally-managed lands and two on mainly private lands. Coal mining and coal mine reclamation provide over 2,800 jobs and payroll of about $246 million. Of course, the left LOVES tax revenue for all their social spending, but would apparently rather not accept the millions of tax dollars generated by coal in New Mexico. Instead, they undoubtedly would rather just tax the ever-shrinking pool of “rich” people in New Mexico.

Those are high-paying jobs available to workers who have attained relatively low levels of education. The average job in the coal industry in New Mexico pays over $90,000 annually while the average job in New Mexico pays less than $40,000.

The ongoing decline in Rail Runner ridership — warning signs for Mayor Berry’s ART?

07.21.2016

The latest ridership numbers are out for the Rail Runner and the numbers look terrible. According to the Albuquerque Journal, ridership dropped an astonishing 11 percent over the past year. Worse, that number has plummeted by 40 percent since its peak. See the charts below:

RailRunnerRidership

Operators blame low gas prices and the bad economy, two interrelated issues that could be blamed for just about everything happening in New Mexico these days. The reality is that new transit projects almost always over-promise and under-deliver (a refrain all-too-common in government generally)

Worse, low ridership is only going to mean greater hemorrhaging of taxpayer dollars on every trip as trains continue to run (costing the same amount, but fare-box collections decline). Obviously, Bill Richardson is the first person to blame, but with taxpayers in the Albuquerque Metro still smarting from one mass-transit boondoggle, why is Mayor Berry pushing a second boondoggle-in-the-making known as Albuquerque Rapid Transit?

Is Mayor Berry really trying to emulate Bill Richardson?

Gary Johnson’s Spending Record as Compared to his Republican Contemporaries

07.20.2016
ALBUQUERQUE — Is former New Mexico governor and Libertarian presidential candidate Gary Johnson a fiscal conservative? Despite his having vetoed upwards of 700 bills – more than any governor in the nation at the time – a National Review columnist, James Spiller argued that Johnson is “not conservative and not even all that libertarian” based largely on Johnson’s fiscal record which he further labels “big-government.”

Rio Grande Foundation policy analyst Tristan Goodwin answers this question in his new policy brief, “How Fiscally Conservative? Gary Johnson’s Spending Record vs. his Republican Contemporaries.” Rather than using arbitrary data points to formulate his answer, Goodwin examines the spending records of Johnson’s Republican contemporaries, especially those “big names” or governors who ran for higher office.

Goodwin first acknowledges the reality that every governor, like every president, faces different pressures and realities from their legislatures. Johnson’s Legislature was dominated 60-40% by Democrats during his time in office.

As seen in the chart below, Johnson was not by himself the most frugal Republican of the era (Engler and future two-time presidential candidate Mike Huckabee were more restrained), but Johnson was far more conservative than future Republican President George W. Bush.
Johnson Spending
Ultimately, noted Goodwin, while hard-core Libertarians might rather see smaller numbers or even spending cuts next to their standard-bearer’s name, the much-larger group of disaffected, fiscally-conservative Republican voters searching for an alternative to Donald Trump can comfortably support Gary Johnson.

Sen. Ivey-Soto misses the boat on charter schools

07.20.2016

There’s a saying in the field of data “Garbage in, garbage out.” In other words, if you use bad data, you’ll get bad information that can lead to bad decisions. Take Sen. Ivey-Soto’s musings about a moratorium on new charter schools based on an LFC report which claims that charters “receive more funding per-pupil than traditional public schools.” You can read the LFC Report here.

This deeply-flawed LFC report has been debunked repeatedly , including by the Albuquerque Journal’s editorial board.

Another study done by the University of Arkansas, found that while New Mexico’s charters are indeed relatively well-funded as compared to charters in other states faced a “weighted disparity amount of only $365 per pupil or 3.4 percent favoring districts.”

The Arkansas report went on to say that, “New Mexico’s funding mechanism dates back decades but began with structural efficacy to achieve funding equity. The state continues to successfully distribute funding on a near-equitable basis year after year.”

There is no doubt that New Mexico faces real budget problems. But innovative approaches in Santa Fe COULD result in greater choice and better outcomes at a net savings to taxpayers. Unfortunately, some would rather make rash decisions based on faulty information.

All this means that New Mexico kids will continue to fall behind unless major structural changes are made to their state’s failing educational system:

600

 

Deregulation improves quality and choice: the example of beer

07.19.2016

I love this chart from Mark Perry of the American Enterprise Institute:

beer

It is hard to believe that America saw its lowest number of breweries less than 40 years ago and is now at its high point numerically. Of course, it’s worth  noting that back in the 1970s, Democrats like Jimmy Carter supported deregulation. 

New Mexico has certainly played a role in the brewery boom thanks in part to tax reductions a few years back.  It IS possible to create new jobs and a diverse array of innovative, high-quality products. There is nothing special about beer that defies the rules of economics.

Unfortunately, it seems like politicians need to constantly be reminded of these basic facts. A few years ago the Rio Grande Foundation provided a list of deregulation ideas. A few have even been adopted, but so much more needs to be done.

 

Reality is Facebook data center won’t be 100% “renewable”

07.18.2016

According to news reports, Facebook is considering both Utah and New Mexico as potential locations for a new data center. Other news reports indicate that the center would create 200 to 300 construction jobs for seven years and between 30 and 50 full-time jobs at the data center in its initial phases.

“Natural-disaster-proof” New Mexico would indeed be an ideal place for Facebook and other companies to locate their data centers.

However, there is always a “catch.” According to the news article linked to at the beginning of the article, “the data center’s electricity energy needs would be served 100 percent by renewable energy.” This is suspicious on its face because data centers need massive quantities of cheap and very reliable electricity. Data centers can’t shut down when the sun doesn’t shine or the wind fails to blow. So, what gives?

According to Paul Chesser at the National Legal and Policy Center:

Companies like Apple, Google, and Facebook have built giant data facilities in North Carolina. They get to (cheaply) use the benefits of the state’s nuclear-, coal- and natural gas-powered electricity, but cloaking it in the guise of a rigged scheme to make them look like they are “green.” And they cash in!

Travis Fisher at the Institute for Energy Research reiterated Chesser’s point and said the following of “100%  renewable” claims:

Many companies such as Apple and Google claim that they get their electricity from 100 percent renewable sources. At best, this claim is misleading and deceptive. We cannot find a single instance of a large company actually going “100 percent renewable.” The reality is that as long as these companies are connected to the electric grid, they still get the vast majority of their electricity from conventional sources such as coal, natural gas, and nuclear power, and are therefore not 100 percent renewable.

We at the Rio Grande Foundation don’t feel the same pressures from the “green” lobby as do Facebook and other tech companies. We certainly understand their desire to be seen as “green” regardless of their massive electricity use. But we do have concerns that the company’s efforts to make themselves look environmentally-friendly will make our electricity grid less stable while raising costs for other rate-payers. This is true whether or not Facebook chooses Utah or New Mexico.

IER-Grid-Project-Electricity-Generation-2013

 

ART’s electric buses: worse for the environment and will require costly additional facilities

07.15.2016

Dowd Muska provided some additional information about how the Berry Administration’s move to electric buses for their ART system is a bad idea that will cost more than traditional diesel buses, but wait…there’s even more bad news!

According to Conservation which is published by University of Washington:, electric buses are actually worse for the environment than their diesel counterparts:

A recent life cycle assessment (LCA) compared battery-powered electric buses to diesel-powered (internal combustion engine) mass transit buses. (1) It revealed that diesel buses have smaller environmental impacts in eight of the 11 impact categories studied. Diesel buses fare better in important environmental categories such as global warming potential (GWP; i.e., carbon footprint), ozone depletion potential, and carcinogens released into the environment. The battery-powered bus fared better only with respect to aquatic eutrophication, land acidification, and the release of non-carcinogens such as mercury, cyanide, and nitrates.

Of course, ABQ RIDE now faces a slew of additional costs (to be born by Albuquerque taxpayers) has no tools, no equipment, no training or knowledge by which the electric buses could be integrated into the system without huge “Support Facility” investment.

Just the electric bus recharging facilities would be a major expense, and would require new lines, terminals, electric service upgrades, and a host of other tools needed to maintain electric buses. Of course, since the rest of the system will remain intact, there will be few cost savings.

BYD Lancaster (Mel Melcon / Los Angeles Times)

Can ART Get Worse? Yes. Yes, It Can.

07.13.2016

art_not_cool

It’s bad enough that “Albuquerque Rapid Transit” will cripple the economic viability of businesses along historic Route 66, induce traffic congestion, (likely) run well over budget, and do zilch to attract and retain Millennial-generation homesteaders.

Now, ART is going electric. According to the Albuquerque Journal, the city is poised to become the first “in the country to operate a fleet of 60-foot-long electric buses. It also would give the city’s bus rapid transit system a chance to earn a gold environmental rating; no other rapid ride transportation system in the U.S. is gold-rated.”

It’s worth noting that Albuquerque has some of the cleanest air in the country, and hardly needs the minuscule emission reductions that would result from electric buses. But of greater concern is the price tag. The buses will cost $7 million more than comparable diesel models. But the Duke City’s mayor, claiming to be “a fiscal conservative,” claims that operating expenses will result in a net lifetime savings of $14 million. If you buy that justification … you haven’t been paying close attention to ART supporters’ tenuous connection to fiscal reality.

Albuquerque’s experiencing a crime wave. Downtown is a ghost town. The metro region has yet to regain all the jobs it lost in the Great Recession. The police department is, to be charitable, troubled. And taxes keep going up.

Maybe the city’s “leaders” should have other priorities than an electrically powered transit project that isn’t wanted, and can’t work?

Sens. Udall and Heinrich Join Anti-Free Speech “Web of Denial” #webofdenial

07.12.2016

ALBUQUERQUE — Yesterday on the floor of the US Senate, New Mexico’s senators and several of their colleagues attacked the free speech rights of free market and conservative organizations. Heinrich, Udall, and their Senate colleagues believe that the “science is settled” on climate change and are attempting to intimidate, shut down, and ultimately criminalize those making arguments against using the full force of government to solve the supposed “climate crisis.”

Said Rio Grande Foundation president Paul Gessing of the Senators’ efforts, “We at the Rio Grande Foundation (and many of the organizations attacked by the Senators) simply oppose massive government programs to address the supposed threat of ‘climate change.’ We have repeatedly pointed out that US carbon emissions have dropped in recent years due to market forces such as the boom in fracking and natural gas production. Command-and-control government solutions are unnecessary especially when the market is working.”

Notably, the free market Cato Institute (the Rio Grande Foundation has hosted Cato’s climate expert Pat Michaels) accepts the so-called “consensus” on global warming. A statement on Cato’s website reads, in part:

Global warming is indeed real, and human activity has been a contributor since 1975. But global warming is also a very complicated and difficult issue that can provoke very unwise policy in response to political pressure.

“Nonetheless,” noted Gessing, “The Cato Institute was among the organizations specifically criticized by the left-wing group of anti-speech US senators. For Heinrich, Udall, and their colleagues it’s not about the science; it’s about imposing a political agenda of massively-expanded government regulation and increased taxes”

In concluding, Gessing noted, “Sens. Udall and Heinrich represent one of America’s most energy-dependent and energy-rich states. One-third of New Mexico’s budget is directly supported by oil and gas while The Land of Enchantment is also a leading producer of coal and has in the past been a leading source of uranium. Carbon-free nuclear is unfortunately not among the ‘solutions’ under consideration by the mainstream climate-change lobby. They’d rather attack their opponents’ free speech rights instead.”

 

 

Hollywood: Leaving Louisiana

07.12.2016

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With New Mexico’s media continuing to slavishly repeat spin about film and television production in the Land of Enchantment, the Associated Press has issued an instructive story on how studios play states for suckers:

Louisiana’s once-booming film industry — dubbed “Hollywood South” — was off by as much as 90 percent this past year, according to the Louisiana Film Entertainment Association. The drop is all attributed to the state’s decision to wind down its generous incentives last July, scaring off movie makers.

Louisiana has handed a whopping $1.4 billion to productions — revenue it wishes it still had, given the state’s budget woes.

Hollywood’s money men aren’t stupid. Their approach to what California calls “runaway productions” is simple: Grab the cash for as long as you can, and hit the road when there’s a better offer. There is zero interest in building sustainable entertainment workforces and infrastructure — in New Mexico, or anywhere else. Studios exist to make profits, and states’ economic-development dreams are irrelevant. It’s all about the bottom line.

But rest assured, New Mexico will stick with its subsidization strategy. Probably no public policy in the Land of Enchantment enjoys more bipartisan support. And for the record, in recent years, job growth in New Mexico’s film-and-television “industry” has been nonexistent. In 2015, there were fewer employees than in 2012:

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Source: U.S. Bureau of Labor Statistics

New cell phone app provides listeners another way to listen to RGF!

07.12.2016

The Rio Grande Foundation has a weekly radio show “Tipping Point New Mexico” on “The Rock of Talk” 1600 KIVA. You can listen to last week’s episode by clicking below:

Now, if you can’t tune in live, you can listen to archived editions of “Tipping Point” at your computer or on the new cell phone app developed at the “Rock of Talk.” That means, wherever you are, if you have your phone, you can listen to both new and archived editions of “Tipping Point New Mexico.”

This is another great way for anyone who wants to hear our great interviews and information about the state of New Mexico’s economy and its political situation to do so. I’ve downloaded the app, you and your friends should too!

Study: NM’s Renewable Energy Mandate Stifles Job Creation and Growth: Economist predicts 3,500 potential jobs eliminated

07.11.2016

ALBUQUERQUE — Today, the Rio Grande Foundation released a new study authored by its president Paul Gessing based on research provided by energy expert Dr. Timothy Considine of the University of Wyoming.

The study which analyzed the impact of New Mexico’s Renewable Portfolio Standard (RPS) finds that the law will decrease New Mexico’s economic growth by $444 million and cost the economy 3,500 jobs by 2020.

The study, “New Mexico’s Renewable Portfolio Standard: An Evaluation of its Impact on the State Economy,” details the impact of RPS on electricity prices, job creation, and economic output through 2040. The study serves as a reminder that despite modest benefits of RPS, state lawmakers cannot ignore the economic implications for their constituents.

Renewable Portfolio Standards (RPS) exist in 29 states and the District of Columbia, requiring that a percentage of electricity be generated by wind, solar, and other forms of renewable energy in order to reduce greenhouse gas emissions.

The study accounts for not only the costs of the law but also the benefits. This year, for example, Dr. Considine finds that New Mexico’s RPS reduces carbon dioxide emissions by more than 4 million tons, infuses $178 million into the state economy, and is responsible for 2,500 new jobs. Those benefits, however, are dramatically-outweighed by its costs.

Additional findings for the Land of Enchantment:

  • By 2020, RPS policies will increase New Mexico electricity costs by almost $206 million annually.
  • The study finds that electricity prices will jump by 7 percent that year alone.

Said Rio Grande Foundation president Paul Gessing.“New Mexico’s economy faces serious challenges. While so-called ‘renewables’ may be part of the solution, mandating them under state law does much more harm than good.”

To view Gessing’s brief, click Here. To read Considine’s entire study,  click HERE. To schedule an interviewcontact Rio Grande Foundation at 505-264-6090 or info@riograndefoundation.org.

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When “Free to Choose,” why do so many people choose Texas?

07.08.2016

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rgf_mf1In celebration of Milton Friedman Day 2016, the Rio Grande Foundation is hosting a discussion of Texas’ economy, what makes it so dynamic, and what New Mexico can do to catch up and, surpass it at some point in the future.

Our speaker will be Bill Peacock, Director of the Center for Economic Freedom, with the Texas Public Policy Foundation. The chart below is just one of many pieces of economic data pointing to Texas as an economic powerhouse.

What specific policies and cultural traits allow Texas to be such a magnet for jobs and economic growth? What can New Mexico learn from Texas? What threats to its economic success does Texas face?

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  • Where: UNM Law School, Room 2401, located at 1117 Stanford Dr. NE, Albuquerque, NM 87106 (see map below).
  • When: Thursday, July 28, 2016, 6:00pm to 7:30pm.
  • Cost: Event is free and open to the public, please register using the registration form. It’s quick and it’s free!

In addition to hearing why so many people are “voting with their feet” by moving to Texas, we will celebrate the legacy of Dr. Milton Friedman by serving birthday cake.

Bill Peacock’s research focuses on economic freedom and growth, property rights, civil justice, and regulatory issues.

Bill has extensive experience in Texas government and policy on a variety of issues, including economic and regulatory policy, natural resources, public finance, and public education. His work has focused on identifying and reducing the harmful effects of regulations on the economy, businesses, and consumers.

Prior to joining the Foundation, Bill served as the Deputy Commissioner for Coastal Resources for Commissioner Jerry Patterson at the Texas General Land Office. Before he worked at the GLO, Bill was a legislative and media consultant, working with groups like Citizens for a Sound Economy and Putting Children First. He also served as the Deputy Assistant Commissioner for Intergovernmental Affairs for Commissioner Rick Perry at the Texas Department of Agriculture and as a legislative aide to Rep. John Culberson in the Texas House of Representatives. Bill began his career in state policy in 1989 in the Texas Senate as the analyst for public education and school finance for the Senate Committee on Education.

Bill has a B.A. in History from the University of Northern Colorado and a M.B.A. with an emphasis in public finance from the University of Houston.

Click here to register.

UNM School of Law

The University of New Mexico School of Law is the law school of the University of New Mexico, located on the North Campus off Stanford Drive between Lomas Blvd. and Indian School Rd. in Albuquerque.

UNM Law School

1117 Stanford Dr. NE
Room 2401
Albuquerque
NM
87106
USA
Map and Directions

Website: http://lawschool.unm.edu/
Phone: 505-277-8612

Price: $0.00

Start Time: 6:00 pm
End Time: 7:30 pm


Date:

July 28, 2016

Address:
UNM School of Law
1117 Stanford Dr. NE
Room 2401
Albuquerque, NM
87106
USA
Map and Directions

Click here to register.

In Just Three Short Decades…

07.08.2016

Patricia “Patty” French, the board chair of the Public Employees Retirement Association, had an … interesting piece in New Mexico Political Report this week. Thanks to reforms adopted in 2013, the official beamed, PERA is “projected to meet our goal of being 100% funded by 2043.”

Feeling better about the Land of Enchantment’s long-term fiscal solvency now? Probably not. But there’s reason for more worry. As the Pew Charitable Trusts recently documented, New Mexico’s total unfunded liabilities — pensions and healthcare for government workers, as well as bonded debt — are quite disturbing. When ranked according to share of state personal income, New Mexico is sixth from the bottom:

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Give French her due. There’s no question that 2013’s pension-reform reform package was a decent first step. Among other things, it reduced cost-of-living (COLA) adjustments from 3 percent to 2 percent for most beneficiaries, delayed COLA eligibility, increased employee contributions, and lengthened the vesting period.

But the ultimate answer to New Mexico’s mammoth pension liability remains a full transfer of all new employees to a defined-contribution system. A flexible, modern approach to retirement income would be good for workers and taxpayers alike. Rest assured, recognizing the power of state-employee unions, legislators’ desire to shift to a 401(k) system is low.

Municipal Mission Creep in Las Cruces

07.07.2016

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Whatever one’s views on the right to bear arms, gun policy is set at the state and national levels. That fact didn’t bother the Las Cruces City Council earlier this week. Four councilors, plus the mayor, voted to approve a resolution calling “on the New Mexico Legislature to enact legislation which requires comprehensive background checks for all firearm sales and which strengthens the criminal background check system for firearms in New Mexico.”

The vote isn’t likely to influence anyone in Santa Fe, but it did offer another example of local-government officials wandering into areas where they don’t belong.

“You run the police department, you run the fire department, you fix the roads, you do a lot of good things, but I don’t think national gun policy is one of them that you should be doing,” said Brad Cates, a former Reagan administration official and candidate for Doña Ana County district attorney.

It’s not like councilors don’t have more important concerns on their plate. Unemployment in the metro region is 6.7 percent, higher than it is in Albuquerque and Santa Fe, and higher than the national average. As the Southern New Mexico Business Coalition’s Don Biad recently lamented: “When you combine — just to name a few issues — the bureaucratic construction permitting processes, local impact fees for developers, minimum wage increase legislation, increased county taxes and the comprehensive development plan that violates private property rights currently working its way through the County Commission, there is no reason to think businesses will want to locate to southern New Mexico. Or even stay for that matter.”